FII investment crosses $11-bn mark in 2013

Written by ENS Economic Bureau | Mumbai | Updated: Apr 30 2013, 14:21pm hrs
DollarHowever, April sees sharp fall compared to previous months. (Reuters)
Foreign institutional investors (FIIs) may well have slowed the pace of investments in the Indian equity market in the recent past, but their net inflows in the current calendar year has crossed yet another psychological mark. The cumulative inflows of foreign investors in the current calendar year (CY13) has crossed the $11-billion mark.

According to data available with Bloomberg and the provisional numbers by stock exchanges, FIIs have been net buyers at $11.13 billion in CY13, which saw both Sensex and Nifty losing around 0.5 per cent each.

Interestingly, the current month has seen a sharp fall in the quantum of FII investments when compared to the previous months of the current calendar year.

In April, FIIs net bought Indian shares worth $980 million. This is the lowest for any month in CY13.

In January and February, foreign investors were net buyers at $4.09 billion and $4.14 billion, respectively. March saw a dip in the flows at $1.9 billion, which was again followed by a fall in the current month.

Incidentally, the slower pace of investments comes at a time when most fund managers are turning bearish on the Indian market. According to a latest fund manager survey by Bank of America Merrill Lynch (BofA ML), India fared the biggest swing in sentiment of emerging market fund managers, moving from a net 44 per cent overweight to 27 per cent underweight in April.

While they also reduced their exposure to China from a net overweight to neutral, India turned the least favoured region among Asian investors with their overweight expanding from 5 per cent in March to 15 per cent in April.

However, the plunge in global gold and crude oil prices is seen bringing in some respite for India, given the importance these commodities have on the countrys current account and fiscal deficits.

Meanwhile, India still figures among the top investment destinations if one compares the flows vis-a-vis other Asian economies.

According to Bloomberg, Japan with $64.21 billion of FII inflows is the only Asian country that has seen higher flows compared to India in CY13.

While South Korea has seen outflows of $4.31 billion in CY13, Indonesia ($1.94 billion), Philippines ($1.25 billion) and Taiwan ($1.46 billion) have all witnessed marginal amount of foreign flows.